1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. It's used to pay off both interest and principal each month so that over the loan term, the loan is paid off in full.

2. How EMI Calculation Works

The calculator uses the standard EMI formula:

Where:

• \( P \) — Loan principal amount
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Loan term in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan with interest over the specified term.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and determining affordability before taking a motor loan.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (as percentage), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect my EMI amount?
A: EMI depends on three main factors - loan amount, interest rate, and loan term. Higher amounts/rates increase EMI, while longer terms reduce EMI.

Q2: Can I reduce my EMI payments?
A: Yes, by either reducing the loan amount, negotiating a lower interest rate, or extending the loan term.

Q3: How does prepayment affect my loan?
A: Prepayments reduce the principal, which can either shorten your loan term or reduce future EMIs, depending on the terms.

Q4: Are there other charges besides EMI?
A: Some loans may have processing fees, insurance, or other charges. Always check the loan agreement for complete details.

Q5: What's better - lower EMI or shorter term?
A: Shorter terms mean higher EMIs but less total interest paid. Choose based on your monthly budget and total cost preference.